BrightPath Early Learning agrees to Arrangement Agreement with Busy Bees for the Acquisition of all BrightPath Shares for Cash Consideration of $0.80 per Share

Key Transaction Highlights:

  • BrightPath shareholders to receive $ 0.80 per share in cash, representing an aggregate transaction value of approximately $145 million;
  • The purchase price represents a premium of 46% to the 30-day volume weighted average price of $0.547; and
  • BrightPath's board of directors unanimously recommends that BrightPath shareholders vote in favour of the transaction.

TORONTO, May 23, 2017 /CNW/ - BrightPath Early Learning Inc. (TSX-V: BPE) ("BrightPath" or the "Company") and Busy Bees Holdings Limited ("Busy Bees"), announced today that Busy Bees and BrightPath have entered into a definitive arrangement agreement (the "Arrangement Agreement") pursuant to which Busy Bees, through Eagle Bidco Limited, an affiliate of Busy Bees ("Eagle Bidco"), will acquire all of the issued and outstanding common shares of BrightPath (the "BrightPath Shares") at a price of $0.80 per BrightPath Share in cash, representing a premium of 46% over the volume-weighted average price of BrightPath Shares on the TSXV of $ 0.547 for the 30 trading days prior to this announcement.  The transaction is valued at approximately $145 million and will be carried out pursuant to the Arrangement Agreement under a court-approved statutory plan of arrangement governed by the Canada Business Corporations Act (the "Arrangement").

The board of directors of BrightPath (the "Board") has unanimously approved entering into the Arrangement Agreement and has determined that the Arrangement is fair to the BrightPath shareholders and is in the best interests of BrightPath and recommends that shareholders vote in favour of the Arrangement. Cormark Securities Inc. has provided a fairness opinion to the Board in connection with the Arrangement to the effect that, as of the date of such opinion, and subject to the assumptions, limitations and qualifications set forth therein, the consideration to be received by BrightPath's common shareholders pursuant to the Arrangement is fair, from a financial point of view.

Jeffrey Olin, Chairman of BrightPath, commented, "After considering and pursuing several options to maximize value for shareholders of BrightPath, the Board believes this is a compelling transaction and price for shareholders. We are pleased that shareholders will be rewarded for their support and commitment in creating, nurturing and advancing BrightPath.  The purchase price represents a significant premium to the market price for the shares both recently and over the past several years.  In addition, we are pleased that the opportunity to create a leading national, high quality professionally managed early learning child care company, as envisioned by its founding shareholders, has been recognized in this transaction. From a startup company just 7 years ago, BrightPath is now recognized as a Canadian leader. We are proud to have developed and opened several new state-of-the-art early learning centres in underserved communities and create more than 2,200 high quality jobs for early learning and other professionals. This transaction will also serve Canadian families well by ensuring that a high quality and well-funded owner with a long-term commitment to the industry can advance BrightPath's strategic goals and opportunities."

The completion of the proposed Arrangement is subject to a number of customary conditions and regulatory approvals, including any required approvals under the Competition Act (Canada), the approval of the Ontario Superior Court of Justice (Commercial List) and the approval of two-thirds of the votes cast by BrightPath's shareholders at an annual and special meeting of shareholders (the "Meeting") to be convened for such purpose, among other matters.  Details concerning the record date for the Meeting, the mailing date and Meeting date will be announced in the coming days.

Each of the directors of BrightPath who beneficially own BrightPath Shares and certain other BrightPath shareholders (collectively, the "Locked-Up Shareholders") have entered into voting and support agreements (the "Voting Agreements") with Eagle Bidco and BrightPath pursuant to which the Locked-Up Shareholders have agreed, subject to the terms thereof, to vote their BrightPath Shares in favour of the Arrangement. The Locked-Up Shareholders hold, collectively, approximately 22% of the outstanding BrightPath Shares.

Pursuant to the Arrangement Agreement, BrightPath is subject to customary non-solicitation covenants and other obligations customary in similar transactions.  In certain circumstances where the Arrangement Agreement is terminated, including if the Board changes its recommendation or BrightPath terminates the Arrangement Agreement to enter into a superior proposal, BrightPath has agreed to pay Eagle Bidco a termination fee of $3,600,000.  In addition, BrightPath has agreed to reimburse Eagle Bidco for its expenses relating to the Arrangement in certain circumstances.

A copy of the Arrangement Agreement and the plan of arrangement relating thereto, the management proxy circular of BrightPath, the Voting Agreements and other related documents will be filed with the Canadian securities regulatory authorities and will be available for viewing on the System for Electronic Document Analysis and Retrieval (SEDAR) website at www.sedar.com.                                                                                                                           

Unless otherwise indicated, all dollar amounts in this press release are in Canadian dollars.

Advisors and Counsel

Cormark Securities Inc. has provided the fairness opinion to the Board.  Fasken Martineau DuMoulin LLP is acting as legal counsel to BrightPath.

BMO Capital Markets is acting as financial advisor to Busy Bees.  Torys LLP is acting as legal counsel to Busy Bees.

About BrightPath Early Learning Inc.

BrightPath is a Canadian leader in the child care industry with 77 locations in major markets across the country. Meeting the highest standards in curriculum, nutrition, technology and recreational programing, BrightPath is committed to providing families the very best child development programs and care that Canada has to offer.

About Busy Bees

Busy Bees is the UK's largest provider of quality child care, looking after 35,000 children across the country, in 329 nurseries. Founded in 1984, Busy Bees is committed to providing quality care for children in a safe, caring environment, meeting each child's individual social, physical and emotional needs. In addition to its UK presence, Busy Bees also operates 70 nurseries across Singapore and Malaysia, including the Asian International College.

This news release includes "forward-looking information" and forward looking statements" (collectively referred to as the "forward-looking statements") within the meaning of Canadian securities legislation and regulation, including those regarding the transaction.  Statements including words such as "may", "will", "could", "should", "would", "plan", "potential", "intend", "anticipate", "believe", "estimate" or "expect" and other words, terms and phrases of similar meaning are forward-looking statements. Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties.  Such forward-looking statements include, but are not limited to, the expected timing of completion of the transaction and the ability to receive the required regulatory, court and shareholder approvals. Although we believe that the expectations, opinions, projections, and comments reflected in these forward-looking statements are reasonable, we can give no assurance that such statements will prove to be correct. A wide variety of potential risks, uncertainties, and other factors could materially affect our ability to achieve the results either expressed or implied by these forward-looking statements including, but not limited to the possibility that the transaction will be rejected by the Company's shareholders; the possibility that even if the transaction is approved by the Company's shareholders, the transaction will not close or that the closing may be delayed; and the failure to obtain and the timing to obtain court approval for the transaction. For more information about risks and uncertainties that the Company is exposed to, you should read the "Risk and Uncertainties" included in its most recent management discussion and analysis which is available at www.sedar.com

The forward-looking statements contained in this news release are expressly qualified in their entirety by the foregoing cautionary statements. All such forward-looking statements are based upon data available as of the date of this release or other specified date and speak only as of such date. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf about any of the matters covered in this release are qualified by these cautionary statements and in the "Risk and Uncertainties" included in the Company's most recent management discussion and analysis which is available at www.sedar.com.  We expressly disclaim any obligation to update or revise any forward-looking statement, whether as a result of new information, change in circumstances, future events, or otherwise.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE BrightPath Early Learning Inc.

For further information: Jeffrey Olin, Chairman, BrightPath Early Learning Inc., Tel: + 1 416 362 6546, http://www.brightpathkids.com

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